2023 (9) TMI 1681

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....rder dated 20-02-2023 in M.A.No.211/PUN/2022 to the limited extent of examining as to whether payment made by the assessee to its foreign entity towards use of overall ICT infrastructure was chargeable to tax in the latter's hands in terms of the Double Tax Avoidance Agreement between India and Netherlands ('the DTAA'). 3. Briefly stated, the facts of the case relevant for our purpose are that the assessee made payment to its wholly owned company Vanderlande Industries Holding, B.V. Netherlands (hereinafter also called "VIBV") amounting to Rs. 53,53,204/-. The Assessing Officer (AO) observed that no deduction of tax at source was made. He held that such amount was chargeable to tax in the hands of the recipient and in the absence of asse....

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.... originally notified DTAA and hence not bringing the amount within the definition of 'Royalties' in the hands of the recipient. It was noticed that para 4(b) of the amended Article 12 covered payment of any kind received for use of industrial, commercial or scientific equipment. In the light of this para of the Notification, the Tribunal held that the case of the assessee was caught in Article 12(4)(b) of the DTAA making the amount taxable in the hands of the recipient requiring deduction of tax at source. 5. The assessee moved rectification application contending that while considering the amendment to Article 12(4)(b) by means of Notification No.11050, dt. 30-08-1999, the Tribunal considered only Para (III) which was effective from 01-....

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....ent was effective only for one year from 01-04-1997, which was contained in the same notification itself in Para (VI), redefining para 4 of Article 12, omitting clause (b) of the original para 4. We have examined Para (VI) of the Notification dated 30-08-1999, effective from April 1, 1998, reading as under : "4. The term 'royalties' as used in this article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, any patent, trademark, design or model, plan, secret formula or process, for information concerning industrial, commercial or scientific experience." 8. On a perusal of the amendment to Article 12(4) o....